How to Set Up a Sole Proprietorship in Switzerland
Setting up a sole proprietorship in Switzerland is one of the simplest and most cost-effective ways to start a business in Switzerland. This legal form is ideal for independent consultants, freelancers, and small business owners looking to operate under their own name or a commercial brand without incorporating a full company.
In this guide, we walk you through the steps, legal obligations, advantages, and pitfalls of setup a Sole Proprietorship in Switzerland, with practical advice from our experts at My Swiss Company SA, a leading fiduciary in Geneva.
What is a Sole Proprietorship?
A Sole Proprietorship is an unincorporated business structure owned and managed by a single individual. It is not a separate legal entity, meaning the owner is personally liable for all obligations and debts of the business.
This structure is widely used in Switzerland by independent professionals, such as IT consultants, architects, therapists, online retailers, and artisans.
Main Characteristics
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Ownership: Single individual
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Legal status: No separate legal entity
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Liability: Unlimited personal liability
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Business name: Can be your full name (e.g., John Smith) or a brand (e.g., Smith Consulting)
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Applicable law: Swiss Code of Obligations (CO), Articles 945 and following
Step-by-Step Guide to Setup a Sole Proprietorship in Switzerland
- Check Your Right to Work
- Swiss citizens and EU/EFTA nationals can create a Raison Individuelle freely.
- Third-country nationals must hold a valid residence permit with self-employment authorization (e.g., Permit B with self-employed status).
- Choose a Business Name
If your business name does not contain your surname, you must register it with the Swiss Commercial Register (Trade Register). If your full name is in the business name, registration is optional (until CHF 100,000 in turnover).
For a sole proprietorship in Switzerland:
If you use your full last name (e.g., Jean Dupont), registration in the Commercial Register is optional as long as your annual turnover remains below CHF 100,000.
However, if you use a different trade name, even partially (e.g., Dupont Consulting or JD Renovation), registration in the Commercial Register becomes mandatory regardless of the turnover.
To setup a sole proprietorship in Switzerland, it is important to understand the legal naming rules and registration thresholds. Choosing a business name that differs from your full surname requires mandatory registration.
Whether you operate under your own name or a business brand, knowing when and how to setup a sole proprietorship in Switzerland ensures compliance and a smooth business launch.
Example:
- “Anna Müller” (no registration required)
- “Swiss Marketing Solutions” (registration required)
- Register with the AVS/AVH (Social Security)
You must register with the social security office (AVS) as self-employed within 3 months of starting activity. You’ll need:
- Identity documents
- A short business description
- Invoices or contracts proving professional activity
Once accepted, you’ll receive a self-employment certificate and AVS number.
- Register with the Commercial Register (if applicable)
Mandatory if:
- Annual turnover > CHF 100,000
- You wish to open a business bank account
- You want to use a trade name without your full surname
Registration is done at the cantonal level (e.g., Geneva, Zurich, Vaud).
- Open a Business Bank Account
While not legally required, having a dedicated Swiss business bank account is highly recommended for clear bookkeeping and credibility.
- Register for VAT (if applicable)
If your turnover exceeds CHF 100,000/year from taxable services or goods, you must register for Swiss VAT (TVA/MWST).
Optional registration is possible below this threshold if you want to deduct input VAT.
Why Choose to setup a Sole Proprietorship in Switzerland ?
Advantages:
- Fast and low-cost setup
- No minimum capital required
- Full control over the business
- Minimal administrative burden
Limitations:
- Unlimited liability (personal assets are at risk)
- No legal personality (may impact credibility with investors)
- Limited access to outside capital
- May be less tax efficient at higher income levels
Fiduciary Support from My Swiss Company SA
At My Swiss Company SA, we help entrepreneurs and independent professionals with every step of setting up a sole proprietorship in Switzerland. Our services include:
- Advising on the right legal form
- Business name availability check
- Commercial Register registration
- AVS affiliation
- VAT registration and compliance
- Bookkeeping and accounting services
- Cross-border tax planning (for EU residents)
We operate in Geneva, Lucerne, and Zug, and we speak your language (French, English, Spanish, German).
Is a Sole Proprietorship in Switzerland Right for You?
A Sole Proprietorship in Switzerland is ideal if you want:
- Full control of your business
- Quick market entry
- Limited startup costs
But if you’re planning to grow, attract partners, or manage risk, you may later consider converting your structure to a Sàrl (GmbH) or SA (AG).